FRANCHISING contributes significantly to Namibia’s GDP but its potential lies not only in generating increased sales of products and services but also in the business-to-business opportunities that exist between them.
Essentially so and even though it is difficult to know how many franchises are operating in Namibia presently, the franchise market is one of the best options available for local entrepreneurs and a potential blueprint for business success.
What is crucial is an understanding that if each of these businesses pledged to procure locally grown, produced and manufactured raw materials for their operations, we could generate much-needed revenue that would remain in Namibia, going to the fiscus and back into local business activity.
Namibians are very receptive to new products, especially in the fast food sector, and so the opportunities for the growth in new franchise names and outlets are extensive. For every shop, restaurant, business or office franchise that opens the buy local message must be top of mind. From ingredients, to packaging, to shop fitting – all those elements can be procured locally and have the potential to make a difference to the economy and the jobs landscape in Namibia.
It would be delightful to see even more commitment to the stocking of local goods and products in these and all other chain stores around the country. To this end, the Growth at Home initiative would gain traction and the labour market would benefit immensely.
With very little doubt, franchising provides enormous economic benefits to the host market. Apart from the economic benefits of employment, output and tax, franchising injects expertise in various industries.
It also increases the entrepreneurial and managerial capabilities and skills of the labour force. The dominant nature of international franchising may, however, create social pressures and perceived challenges to national economic development and empowerment strategies.
In Namibia, large sections of the modern retail sector is dominated by powerful foreign businesses and other trans-nationals. This section has the monopoly power over the franchise sector. More often there is collusion with powerful elites in Government acting as bodyguards of these retail transnationals which calls for protection and measures to protect not just the products produced locally but also other growing local businesses.
The absence of the franchise law in Namibia also in this frame remains a challenge and a huge stumbling block. Franchise law could in its full design provide protection to local businesspeople. There are around eight countries in Africa with franchise law. South Africa and Tunisia have expressly regulated franchising. Kenya, Uganda, Nigeria, Egypt, Angola and Cape Verde regulate franchising through technology transfer legislation, application of agency laws or through the application of consumer protection legislation, something that Namibia will need to employ in the near future.
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